Tesla appears to be on the verge of accepting bitcoin payments again after the latest data suggests that Elon Musk’s environmental criteria for the cryptocurrency have finally been met.
Speaking at The ₿ Word Bitcoin conference this week, Mr. Musk reiterated Tesla’s promise to resume accepting crypto payments when “the percentage of renewable energy usage is most likely at or above 50 percent and a trend toward that number is increasing consists”.
>> Follow the latest crypto market updates The independents Bitcoin live blog
The electric automaker first announced it would accept bitcoin payments in February before returning in May, citing climate concerns related to the cryptocurrency’s energy consumption.
At the time, most of Bitcoin’s energy needs were met by fossil fuels in China, and it was estimated that the computers that support the cryptocurrency’s network used almost as much electricity as the entire country of Argentina. Since then, tough crackdowns by the Chinese government have forced Bitcoin miners to move to other countries that are more reliant on renewable energy sources.
Shortly after Tesla reversed its decision to accept Bitcoin payments, a new group was formed to investigate and promote sustainable solutions for Bitcoin.
The Bitcoin Mining Council released its first report this month, revealing that most of the Bitcoin network is now using electricity from renewable sources.
After a survey of 32 percent of the current network, it was found that the participants use an energy mix, 67 percent of which comes from renewable energy providers. Transferring this data across the ecosystem suggests that 56 percent of Bitcoin mining is powered by renewable energy.
According to the report, Bitcoin is “one of the most sustainable industries in the world”.
Since the report was written, the move away from China has continued to add to this trend. Recent data from the University of Cambridge showed that the government’s crackdown on Bitcoin mining in China reduced the country’s mining share from more than 75 percent in 2019 to just 46 percent by May 2021.
“It looks like Bitcoin is shifting a lot more towards renewable energy and a number of the high-performance coal-fired power plants that have clearly been in use, particularly in China, have been closed,” Musk admitted on Wednesday.
Next to him at the event was Twitter boss and Bitcoin advocate Jack Dorsey. In his efforts to convince Mr. Musk that this renewable energy trend was already underway, Mr. Dorsey redoubled his claim that Bitcoin is indeed incentivizing renewable energy.
Payment company Square, which Mr. Dorsey also runs, released a white paper earlier this year outlining how cryptocurrency could “facilitate the transition to a cleaner, more resilient power grid.”
The idea is that bitcoin mining could meet demand for renewable energy during fluctuations in overproduction, encouraging the establishment of more clean energy plants.
“Solar and wind produce cheaper energy than fossil fuels. This should make them ubiquitous, but they are held back by an obvious flaw: they produce too much energy when demand is low and not enough when demand is high, “said a Square spokesman.
“What can solve this problem is an ecosystem in which solar / wind, batteries and bitcoin mining coexist to form a green grid that runs almost entirely on renewable energy. This is not only doable, but also doable without jeopardizing the profitability of the sector. “
A recent analysis of Bitcoin’s energy consumption by leading cryptocurrency exchange CoinCorner found that the introduction of the Lightning Network, which makes Bitcoin transactions more efficient, means its carbon footprint compared to other everyday activities like sending an email or a tweet is relatively negligible.
The report, released Thursday, found miners “flocking to the cheapest energy sources in the world,” which increasingly have renewable energy.
It states: “Within the next five years, 90 percent green energy sources could be possible and by 2031 possibly zero emissions, if not one of the cleanest industries in the world.
“With the advent of more sustainable power generation, the widespread adoption of Lightning, and the potential for even more scaling, Bitcoin appears to be one of the most efficient payment providers, stores of value, and influential technologies in the world.”
By the end of the discussion at The ₿ Word event, Mr. Musk seemed hopeful that Tesla could be the first of many companies to push the mass adoption of Bitcoin as a mainstream currency.
He said the “most likely answer is for Tesla to accept bitcoin again” and even went so far as to encourage Twitter to accept bitcoin payments from advertisers.
After a moment’s hesitation, Mr. Dorsey replied, “Let’s do it.”